/ 2026-2027 New Maximum TERs for Chilean Pension Fund Investments
June 15, 2026Some drop, certain others rise. Period: July 1, 2026 to June 30, 2027.
Felipe Cousiño
Partner
Francisca Donoso
Senior Associate
Laura Tressler
Associate
On June 12, 2026, the securities, banking and insurance regulator (Comisión para el Mercado Financiero – “CMF”) and the pension regulator (Superintendencia de Pensiones – “SP”) published for comment the proposed annual update to the maximum total expense ratios (“Max TERs”) applicable to investments made by Chilean pension funds. These limits are jointly set by the CMF and the SP. The excess over such Max TER must be borne by the pension fund managers (“AFPs”).
As may be noted in the chart below, some Max TERs are raised and others are lowered. Notably, equity and fixed income ETFs in developed and global markets and funds of funds in alternative assets see increases, while domestic real estate and infrastructure funds and gold ETFs show significant decreases. However, no distinction continues to be made between actively managed and passive ETFs.
Notably:
- Max TERs for equity index mutual funds slightly decreased from 0.30% to 0.29%.
- Max TERs for emerging market equity mutual funds decreased from 1.17% to 1.14%.
- Max TERs for liquidity funds (i.e. money market funds) rose from 0.24% to 0.26%.
- Max TERs for developed and global market equity ETFs increased from 0.60% to 0.66%.
- Max TERs for private equity and private debt funds of funds rose from 3.81% to 3.88%.
- Max TERs for domestic real estate and infrastructure closed-end funds decreased significantly from 2.01% to 1.69%.
- Max TERs for gold ETFs decreased from 0.91% to 0.75%.
The data sources and statistical methodologies used to determine these values were Morningstar for registered funds and Preqin for private equity and credit. It is worth noting that, for alternative assets and real estate and infrastructure funds, the methodology moves from the 90th percentile down to the 75th percentile as part of a transitional period, with the latter to be applied in full from the next annual determination.
Additionally, Chilean feeder fund fee reporting must continue to comply with the ILPA standard, in line with sponsors receiving direct investments.
Updated Maximum TERs (2026–2027)
Foreign and domestic mutual funds and domestic Closed-End Funds (transferable)
| Asset Type | Geographical Zone | Business Style | Old Max TER | New Max TER |
| Stocks (Equity) | Developed, Emerging and Global | Index | 0.30% | 0.29% |
| Developed and Global | Others | 0.99% | 0.99% | |
| Emerging | Others | 1.17% | 1.14% | |
| Bonds (Fixed Income) | Developed | Index | 0.12% | 0.12% |
| High Yield | 0.80% | 0.79% | ||
| Others | 0.64% | 0.64% | ||
| Emerging | 0.96% | 0.96% | ||
| Global | 0.75% | 0.77% | ||
| Balanced | 0.97% | 0.96% | ||
| Liquidity | 0.24% | 0.26% |
Exchange Traded Funds (ETFs)
| Asset Type | Geographical Zone | Business Style | Old Max TER | New Max TER |
| Stocks (Equity) | Developed and Global | 0.60% | 0.66% | |
| Emerging | 0.75% | 0.75% | ||
| Bonds (Fixed Income) | Developed and Global | Others | 0.42% | 0.44% |
| Emerging | 0.53% | 0.55% | ||
| Developed and Global | High Yield | 0.53% | 0.55% |
Alternative Assets
| Investment Type | Old Max TER | New Max TER |
| Private Equity (includes co-investment) | 2.40% | 2.40% |
| Private Debt (includes co-investment) | 2.40% | 2.40% |
| Private Equity Funds of Funds | 3.81% | 3.88% |
| Private Debt Funds of Funds | 3.81% | 3.88% |
| Domestic Closed-End Real Estate and Infrastructure Funds | 2.01% | 1.69% |
| Gold ETFs | 0.91% | 0.75% |
Aggregate Underlying Fee Cap and Prohibitions on Underlying Fees for Domestic Exposure
As of April 1, 2026, the restrictions on the payment of underlying fees charged to pension funds came into force, pursuant to the new seventh paragraph of Article 45 bis of Decree Law No. 3,500, introduced by Law No. 21,735 on Pension Reform.
Under this framework, pension funds are prohibited from paying fees to investment vehicles or managers that invest more than 10% in certain domestic instruments (including, among others, time deposits, corporate bonds, shares, and mutual fund units) or in instruments issued by the Central Bank or the General Treasury of the Republic.
The main exceptions are:
- Vehicles that invest primarily — at least 90% of their assets — in domestic issuers of low or medium capitalization, defined as those not included in the IPSA index and whose equity is lower than that of the smallest company within said index.
- Domestic or foreign vehicles with a regional or global investment focus that maintain exposure in Chile to the aforementioned domestic instruments below 12%.
Additionally, as of November 1, 2026, annual aggregate caps on underlying fees will come into effect by fund type. These caps on the blended rates for all underlying funds will apply through March 31, 2027, the last date on which the current multi-fund system will operate:
| Pension Fund Type | Annual Aggregate Cap |
| Pension Fund A | 0.51% |
| Pension Fund B | 0.42% |
| Pension Fund C | 0.34% |
| Pension Fund D | 0.18% |
| Pension Fund E | 0.11% |
These aggregate caps are in addition to — and do not replace — the Max TER regime applicable at the individual underlying fund level described above. As of April 1, 2027, Target Date Funds (Fondos Generacionales) will replace the current multi-fund system; and the maximum aggregate fee levels for those funds will be established in due course by the SP.
If you need more information, please do not hesitate to contact our Capital Markets team.
